- Absolutely… It may even hit it now! If you want it to…
This was my answer to those who asked me whether USD/TRY would hit 4, 30.
For some, this came across a bit surprising, but as of this morning, the duo reached even above the “potentially impossible” level. I can see that more experienced and reasonable experts are slowly making peace with the possibility that USD/TRY may soon test 4, 50 too.
But, which levels can be considered crisis situations?
From everyday citizen to business owners, a majority say if the duo exceeds above 5, 00, this would quite probably lead to a crisis. The funny thing is USD/TRY going wildly up until it hits 5,00 would be considered perfectly normal! I can imagine even those tuned into exchange rate fluctuations all day long cannot take their eyes off of the screen, oddly satisfied and wondering whether it would reach higher levels.
“They look on and do nothing…”
But, the most interesting thing is that the Economy Administration has become one of these spectators, constantly wondering, “Let’s see how far it will go up”. The Government released only one statement about this ongoing rise in interest and exchange rates up to now, “Expect a decline after the elections”. This statement makes me think of two things: First, no one seems to be concerned about this problem with their eyes set on the upcoming elections. Second, the Economy Administration does not have any weapon to interfere with the situation.
US withdrawal from Iran nuclear deal dropped like a bombshell on the global agenda, resulting in huge swings in exchange rates worldwide. Needless to say USD/TRY was also negatively affected.
“We will impose sanctions on other countries too” was another striking declaration by the US Government. Sadly, both economic and political agenda has been quite bumpy and unpleasant lately.
Not:While you read this report, President Erdogan summoned every staff in economic administration to Presidential Palace. Let see what happens.